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LCB Head’s Past Sparks Questions Over Slots License

OCEAN CITY — With the introduction of Worcester County’s first slots parlor reportedly opening in less than three months, local vendors are in the process of going through the required protocol to earn the right to do business at Ocean Downs.

Yet, an interesting question was raised this week: whether the Worcester County Liquor Control Board will be able to even get a vendor’s license granted by the Maryland State Lottery Commission based on its executive director’s checkered past?

It is no secret to many people in Worcester County, including the very Board of Directors that hired him in 2007, that LCB Executive Director Brian Sturgeon is in fact a convicted felon, and although he has paid his debts to society, the fact remains that Sturgeon’s past is a sore subject with some in the industry, most notably, many of the county’s 187 licensees.

“I find it ironic that a guy who couldn’t get a liquor license if he opened his own restaurant because of his record, holds the fate of every person that has been granted a liquor license in Worcester County in his hands,” said Chris Denny, owner of Cheers!.

Sturgeon was found guilty by a U.S. District Court in 1998 on 12 felony charges, which included money laundering, mail and wire fraud, and giving false declarations to a grand jury. He was later convicted and sentenced to nearly four years in federal prison and forced to pay over $2.3 million in restitution to the victims of the scams along with his co-conspirators, including his employer and former close friend and mentor, Otto Von Bressendorf.

As per the Maryland State Lottery Commission’s rules and regulations, any vendor that plans on doing more than $10,000 worth of business with a slots facility (in this case, Ocean Downs) must go through a thorough background check, and submit all the names of any employee that would do any sort of work at the slots facility, and in addition, pay $500 for a three-year permit to do business with Ocean Downs.

Terry Loughlin of Carey Distributors said that he just went through the process for obtaining a license, and wrote the check this past week for more than a dozen different Carey Distributors’ employees to distribute and/or sell beer, wine at the racetrack/slots parlor.

“If that’s what we have to do, then that’s what we have to do,” said Loughlin. “I just want to make sure that the LCB is being forced to play by the same rules as we are with the new slots parlor, because it has become apparent in the last several months that no one really knows who it is that they answer to and what rules they have to abide by.”

When Loughlin questioned Maryland Lottery Commission’s George Currie, who handles the licensing of vendors, if a felony charge would preclude someone from being granted a permit to conduct business at Ocean Downs, Currie replied via email, “it depends on the felony and not necessarily. But obviously the gaming industry must be clean as possible to provide the public with confidence in the program.”

Insiders in Annapolis believe that the LCB would be held to the same high standards of background checks conducted by the State Lottery Commission, and since all liquor purchased in Worcester County must be bought from the LCB, which is a quasi-governmental monopoly, a denied vendors’ permit could potentially make Ocean Downs a beer and wine slots parlor only.

LCB member Larry Wilkinson and Sturgeon did not return phone calls this week, but Sturgeon did speak candidly to The Dispatch in 2009 about his past record and expressed both remorse and regret for his “mistakes.”

“When you do break the law, you have to own up to it, and you have to be punished”, said Sturgeon in 2009, “I paid dearly for it, I lost several years of my life, and I’m still paying for it after all these years. … I have tried ever since that day to live an exemplary life. In many ways, it prepared me for the next phase of my life. I have to be twice as good and twice as effective as anybody else who might be in my position. I’ve never said I didn’t do it or tried to hide from it in any way. I just feel like I have something to prove just about everyday.”

Phone calls to the Maryland Slots Commission, and to several members of the State Lottery Commission, including Currie, also went unanswered this week, despite many attempts to obtain a simple definition of what determines an “approved” vendor license or a “denied” vendor license based on the findings of the required background checks.

The Ocean Downs location will reportedly feature 34,000 square feet and 800 video lottery terminals. Ocean Downs had reportedly been aiming to open this past May, but after aging steel beams, asbestos and lead paint were found during the demolition process, the opening date was pushed back to Dec. 16.

The LCB is still under investigation by the Maryland State Comptroller’s office for accusations of unlawful pricing practices, price gouging and unethical tactics, which came to the forefront in April. The Comptroller’s office told The Dispatch that the findings of the investigation would be made public sometime in December.

Ocean Downs officials said they were unsure whether anyone from the LCB had filed the necessary paperwork for their vendor’s license with the state.